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January 27, 2012

Realtors see positive signs

Jamie Jones jamiejones@daltoncitizen.com

“Cautiously optimistic.”

That’s how Jim Gillespie, chief executive officer of the real estate company Coldwell Banker, describes his outlook on the housing industry as the nation struggles with the effects of the Great Recession.

“I would say I’m cautiously optimistic we’re on the road to recovery,” said Gillespie, who was in Dalton on Thursday for Coldwell Banker Kinard Realty’s annual awards luncheon. “We’re in better shape than we were three years ago. The argument is, ‘Shouldn’t we be farther along?’ That’s a political argument, and a political argument I’m not getting into. I can tell you we’re moving in the right direction.”

Gillespie, who has more than 30 years experience in real estate, said one of the major obstacles to the housing industry’s recovery is the fragile nature of consumer confidence. Just a few months of bad news can damage consumer confidence, he said, and make potential homebuyers think twice about jumping into the real estate market.

“It’s delicate,” Gillespie said. “You can have something crazy going on in Europe with the debt crisis or something wild like the tsunami that disrupted auto sales in Japan.”

2011 was the worst year for new home sales dating to 1963. New home sales fell 2.2 percent last month to a seasonally adjusted annual rate of 307,000, according to the U.S. Commerce Department. That pace is less than half the 700,000 that economists say must be sold in a healthy economy, according to The Associated Press. However, new home sales rose in the final quarter of 2011.

At the local Coldwell Banker office, the brokers are seeing an “uptick” in sales.

“There’s a glimmer of hope, and hopefully it will get brighter,” broker John Thomas said. “I think that is what is going to happen this year. You’ve got interest rates at 30-year lows — below 4 percent —and that goes back to people wanting to be optimistic. Hey, in the 1980s, at one point interest rates in some parts of the country were over 20 percent.”

However, the brokers also worry about the effects grim news has on the American psyche.

“The fragile part you’re talking about, just look at gas and how it can affect consumer confidence,” broker Bill Blackwood said. “Some are saying by Memorial Day, gas can be $4.50 a gallon. It doesn’t take much of that to have a big impact on recovery. I think people want to feel good, that there’s some traction that we’re coming out of it. Like I said, it doesn’t take but just a little blip on the radar to make everybody nervous.”

Broker Mike Maret said the real estate industry needs to do a better job of educating the consumer.

“We’ve got to make sure everybody understands that incredible opportunities are out there right now,” Maret said. “A combination of price and rate. Some of the houses that we are selling right now, price is absolutely unbelievable.”

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